If state determines it overpaid unemployment benefits, it can garnish your tax refund

CHARLOTTE, N.C. — Many people who lost their jobs or had their work hours reduced during the pandemic and received unemployment benefits are now being told that they need to pay back some of the money because they were overpaid. Some are being told they owe thousands, and with tax season approaching, they’re also learning the state may keep their refund and apply it toward the amount they owe.

Coronica Hall says she received a letter from the state informing her that she was overpaid in unemployment benefits, and she now owes money.

“I did not think it was a possibility,” she said. “If I was not eligible to receive pandemic unemployment, then why did you give it to me?”

The letter stated that she owes more than $9,000, or $375 per month.

“I was like, ‘I just started back working. There’s no way I can pay $375 a month,’” she told Action 9′s Jason Stoogenke.

Stoogenke says there are several reasons why someone may owe money after receiving unemployment benefits:

— They started working but did not report it quickly enough and kept receiving benefits.

— They did not meet the required work searches.

— The state discovered that information provided when applying for benefits or weekly certification was not accurate.

The state of North Carolina says it has a duty to prevent “fraud, waste, and abuse” to make sure it doesn’t give tax dollars to the wrong people.

Stoogenke asked North Carolina unemployment officials for amounts, and at last check, they said since the start of the pandemic:

— The state has paid more than $14 billion in unemployment benefits.

— Officials believe it overpaid about $850 million in benefits.

— The state has recovered about $75 million so far.

— This impacts roughly 175,000 people who received unemployment benefits.

If you can’t pay back the money you owe, the state can garnish your federal or state tax refund.

Stoogenke says, unfortunately, there’s not much you can do to stop it, and that’s why it’s important to make sure you do everything correctly from the beginning.

The state does offer payment plans and you can appeal, but you only have 30 days from the date the state determines it overpaid you to file an appeal.

(WATCH: IRS will begin accepting 2021 tax returns on Jan. 24)